The effect of environmental tonicity on the interaction between arginine vasopressin (AVP) and prostaglandin (PG) E in the production of adenosine-3',5'-cyclic monophosphate (cAMP) was studied in cultured rat renal papillary collecting tubule cells. Both AVP and PGE2 stimulated intracellular cAMP accumulation in a dose-dependent manner in an isotonic medium of 300 mOsm/kg H20 in the presence of a phosphodiesterase inhibitor. Environmental tonicity modulated the effect of AVP, PGE, or of both, on cellular cAMP production. The hypertonic medium with 1,800 mOsm/kg H20 enhanced the effect of 1><10_9 M AVP on the cellular cAMP production 1.6-fold, but markedly reduced the effect of 2 >< 10's M PGE, or PGE2 to one-sixth or one-third ofthat in the isotonic medium. The inhibitory effect of PGE, and PGE,»; on the action of AVP was not shown in the isotonic medium, but was seen in the hypertonic medium of 1,800 mOsm/kg H20. Synthesis of [3H]PGE2 was enhanced by hypertonicity, but not by AVP, when [3H]arachidonic acid was incorporated in the medium. The results indicate that an environmental tonicity is an important factor in modulating the effect ofPGE, or PGE2 on AVP-mediated cAMP production in renal papillary collecting tubule cells.